Vessel Repair Entry No. C27-0171397-9; SEA-LAND ENDURANCE; V-002; Staging, Rigging, Transportation and Meal Charges; 19 U.S.C. § 1466

HQ 115412 July 25, 2001 VES-13-18-RR:IT:EC 115412 GEV CATEGORY: Carriers Chief, Liquidation Branch U.S. Customs Service Post Office Box 2450 San Francisco, CA 94126 RE: Vessel Repair Entry No. C27-0171397-9; SEA-LAND ENDURANCE; V-002; Staging, Rigging, Transportation and Meal Charges; 19 U.S.C. § 1466 Dear Sir: This is in response to your memorandum dated June 18, 2001, forwarding a petition for review for relief from duties assessed pursuant to 19 U.S.C. § 1466. Our findings are set forth below. FACTS: The SEA-LAND ENDURANCE is a U.S.-flag vessel operated by U.S. Ship Management, Inc., of Charlotte, North Carolina. Subsequent to the completion of foreign shipyard work, the vessel arrived in Los Angeles, CA on May 3, 2000. A vessel repair entry was timely filed. An application for relief with supporting documentation was timely filed. Pursuant to your letters dated May 16, 2001, and May 23, 2001, the former enclosing our ruling letter 115133, dated May 11, 2001, your office denied in part and granted in part the aforementioned application. A petition for review of this decision was timely filed seeking relief with respect to staging, rigging, transportation and meal charges for technicians to attend the vessel in Asia during her drydock period. - 2 - In addition, the petitioner has enclosed a completed CF-7501-A covering magnetrons identified in MacKay Communications invoice no. 051967. ISSUES: 1. Whether the staging, rigging, transportation and meal charges for which the petitioner seeks relief are dutiable pursuant to 19 U.S.C. § 1466. 2. Whether a completed Entry Summary Continuation Sheet (CF 7501-A) pertaining to claims arising under 19 U.S.C. § 1466(h)(3) may be submitted subsequent to the filing of a vessel repair entry. LAW AND ANALYSIS: Title 19, United States Code, § 1466, provides in pertinent part for the payment of an ad valorem duty of 50 percent of the cost of "...equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States..." In regard to the staging, rigging, transportation and meal charges at issue, the petitioner does not dispute the fact that these costs were incurred pursuant to dutiable repairs. Rather, the petitioner’s sole claim for relief is that, "We feel staging, rigging, transportation, and meals are not actually labor performed on or materials used on the vessel and they should be excluded from Customs duties." While the petitioner’s statement at one time reflected Customs position with respect to such charges, pursuant to the decision of the U.S. Court of Appeals for the Federal Circuit (CAFC) in Texaco Marine Services, Inc., and Texaco Refining and Marketing, Inc., v. United States, 44 F.3d 1539 (1994), it no longer represents Customs position in this matter. (See also Customs memorandum 113308, dated January 18, 1995, published in the Customs Bulletin on February 8, 1995 (Customs Bulletin and Decisions, vol. 29, no. 6, at p. 59), as clarified in Customs memorandum 113350, dated March 3, 1995, published in the Customs Bulletin on April 5, 1995 (Customs Bulletin and Decisions, vol. 29, no. 14, at p. 24)). Furthermore, it should be noted that in post-Texaco vessel repair entries such as the one - 3 - currently under consideration, Customs has held such charges incurred pursuant to dutiable repair work to be dutiable. (Customs ruling letter 115100, dated October 26, 2000) Accordingly, the staging, rigging, transportation and meal charges in question are dutiable. With respect to the completed CF 7501-A submitted by the petitioner covering magnetrons identified in MacKay Communications invoice no. 051967, we note that pursuant to the issuance of instructions by Customs Headquarters on May 31, 1995, in instances in which a vessel operator claims certain foreign parts expenditures to be within the terms of 19 U.S.C. § 1466(h)(3), it is required that continuation sheets normally submitted with entries for consumption (CF 7501-A) must be completed and attached to the vessel repair entry form. In the absence of evidence indicative of such timely submission, the petitioner’s claims pursuant to § 1466(h)(3) for this item are denied. HOLDINGS: 1. The staging, rigging, transportation and meal charges for which the petitioner seeks relief are dutiable pursuant to 19 U.S.C. § 1466. 2. A completed Entry Summary Continuation Sheet (CF 7501-A) pertaining to claims arising under 19 U.S.C. § 1466(h)(3) is not to be submitted subsequent to the filing of a vessel repair entry. Accordingly, the petition is denied in full. Sincerely, Larry L. Burton Chief Entry Procedures and Carriers Branch